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  1. Buying a Home: Introduction
  2. Buying a Home: Choosing Your Location
  3. Buying a Home: Determine Which Kind of Home Suits Your Needs
  4. Buying a Home: Calculate How Much Home You Can Afford
  5. Buying a Home: Special Programs for First-Time Buyers
  6. Buying a Home: Get Preapproved for a Loan
  7. Buying a Home: Find an Agent
  8. Buying a Home: Find a Home
  9. Buying a Home: Write an Offer
  10. Buying a Home: Go Through the Escrow Process
  11. Buying a Home: Get Properly Insured
  12. Buying a Home: Close and Become a Homeowner
  13. Buying a Home: Conclusion

Whether you want to buy a home as an investment, a lifestyle upgrade or both, one of the most important decisions you will make is where you want to live. Your home’s location will help determine not only the future value of your investment, but also many aspects of your everyday life.

Factors to Consider When Choosing Your Location


The part of the country you choose to live in will have a major impact on your lifestyle. Particularly if you want to stay in your home for a long time, make this decision carefully, considering the factors that are most important to you, such as average home prices in the area, job opportunities in your field, proximity to loved ones and climate.

City vs. Suburb vs. Rural

The setting you choose within the city or town you select will affect the amount of peace and quiet you have; your lot size (if you’re buying a house rather than a condo or townhome); primary and secondary education options for your children; proximity to shopping, entertainment, medical services and anything else you might want or need; and more.


Within a particular area, different neighborhoods will have different characteristics. You’ll want to pick the one that is the closest fit to your lifestyle and personality – a place where you’ll feel comfortable and where you are likely to get along with your neighbors. You’ll also want to live close to the places you visit frequently, such as grocery stores, your job (if you plan to keep that job long-term), and, if you have kids, the schools you want them to attend. Further, some neighborhoods have homeowners associations or deed restrictions that impose limits and requirements on how you can adorn your home and how you must maintain it. For example, you might not be able to leave trash cans out past a certain hour on trash day, paint your house blue or let your grass grow too tall. Some people appreciate rules like these because they can give the neighborhood a tidier appearance and may boost property values. Others find them obnoxious.

Also consider the risk of natural disasters such as fires and floods, which can be expensive to insure against but can often be mitigated by choosing your location wisely, even within a higher-risk area. For example, some homes within a neighborhood may have a history of repeated flooding, while others may never have flooded. Similarly, in a wildfire risk area, choosing a home several miles away from brush can reduce your risk.

School District

If you have or are planning to have kids, school district is a key consideration. Living in a good public school district will save you tens of thousands of dollars that you might otherwise be tempted to spend on private school. And even if you don’t have kids, it may still be a good idea to consider the quality of neighborhood schools when choosing your location in order to maximize the value of your investment.

You may pay a premium to live in a neighborhood with good schools. You’ll have to consider how that premium compares to the cost of paying for private school or sending your children to a subpar educational institution. If you don’t have kids, the premium might not be worth it – or it might make your home easier to sell one day. (See Top 4 Things That Determine a Home’s Value.)

Proximity to Work

The length of your daily commute can hurt or help your disposable income, quality of life and how much time you spend at home with your family. How long a commute can you endure? Are you planning to stay at your current job long term or do you expect to change jobs? If you plan to stay at your current job, how close to work do you want to live? If you plan to change jobs, what are the job prospects in or near the area where you’d like to live? (For more insight on commuting, see Extreme Commuting: Is It for You?)


For most people, safety is a top consideration. You’ll often pay less to live in an area with higher crime, but you may pay in other ways, such as fear, alarm systems and theft losses. It may also be harder to resell your home or get a good price for it. Buy a home in the safest area you can afford, unless you’re speculating that a currently run-down area will turn around in a few years and you can handle the roughness and the risk.

Proximity to Friends and Family

The best home may not feel very homey if you live too far away from your friends and family. But your friends and family might end up moving at some point, so make sure their proximity isn’t your only reason for choosing a location.

Proximity to Leisure Activities

What do you enjoy doing in your free time? If you have season tickets for a particular sports team, you may not want to live way far from their stadium. If you love to go out to eat, you might not be happy living somewhere with few restaurants. But if your favorite thing to do is stay home, all that might be less of an issue.

Once you’ve narrowed down the location factors that matter most to you, it’s time to research that location to make sure you’re getting what you bargained for. (To learn more about getting your money’s worth by owning a home, read Measuring the Benefits of Home Ownership.)

Research the Neighborhood

Facts and statistics are available online through websites, forums and message boards. What do the crime statistics look like? What is the average income? How many people have a college education? Do the statistics reflect the kind of neighborhood you’d feel comfortable living in? Track down these statistics through real estate websites. Statistics rarely tell the whole story, though, so try talking to current residents and the local police department for additional information. Local Facebook groups may help.

Visit During the Day and at Night

What a neighborhood looks like on paper and how you feel when you’re in it can be worlds apart. And sometimes little details make a big difference. For example, some neighborhoods have narrow roads, lots of cars parked on the street, no sidewalks or distinctive architectural features that may not suit your tastes. If these things aren’t what you envisioned in your ideal neighborhood, you may not want to live there no matter how great the statistics are.

Also, a neighborhood might feel comfortable during the day, but seem disconcerting at night. It’s important to visit several on different days, at different times and in different weather conditions to get an accurate picture of the neighborhood’s character. It can be hard to judge a neighborhood’s character in the dead of winter or on a rainy day when everyone is cooped up indoors. You’ll also want to check for things like how well lit the neighborhood is at night, which you can’t observe during the day.

Who Are Your Potential Neighbors?

What kind of people live in the neighborhoods you’re considering? Will you feel comfortable in the community? If you’re not into gardening and are laissez-faire about yard maintenance, you might not want to live in an area where every yard is aggressively landscaped and groomed. If you’re a staunch Republican, you might not want to live in an area that’s known for its  liberal-mindedness or vice versa. It all depends on your beliefs and preferences. Some people want to live near others who are like them, some don’t want to live in a homogeneous environment and others don’t care either way.

The 'Keeping Up with the Joneses' Factor

In some neighborhoods, people keep to themselves. In others, you (or your kids) might feel pressure to keep up socially by doing things like joining country clubs, taking high-end vacations or owning certain vehicles. If you don’t want this kind of pressure, don’t choose a neighborhood that encourages it. (For more on social pressure to spend, see Stop Keeping Up with the Joneses — They’re Broke.)

Once you have a good sense of what kind of neighborhood suits your needs, it’s time to think about what kind of home you’d like. In the next section, we’ll explore the pros and cons of condominiums, townhouses and houses.

Buying a Home: Determine Which Kind of Home Suits Your Needs
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